Google races to parry the rise of Facebook in India

Google CEO Sundar Pichai mapped out a new strategy for India. (Reuters)
Updated 05 September 2018
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Google races to parry the rise of Facebook in India

  • Facebook’s success has shaken Alphabet Inc’s Google, led by an Indian-born CEO, Sundar Pichai, who has made developing markets a priority
  • Google officials in India earlier this year were alarmed to learn that Facebook Inc. was likely to generate about $980 million in revenue in the country in 2018

DUBAI: Google retains only a slight lead over Facebook in the competition for digital ad dollars in the crucial India market, sources familiar with the figures say, even though the search giant has been in the country far longer and has avoided the controversies that have dogged its rival.
Facebook’s success has shaken Alphabet Inc’s Google, led by an Indian-born CEO, Sundar Pichai, who has made developing markets a priority.
Google officials in India earlier this year were alarmed to learn that Facebook Inc. was likely to generate about $980 million in revenue in the country in 2018, according to one of the sources. Google’s India revenues reached $1 billion only last year.
Google is now pushing back, attempting to lure customers with better ad-buying tools and more localized services.
The battle in India reflects an epic challenge for Google in developing markets around the world that are crucial to the company’s long-term growth — many consumers in those country’s are gravitating to Facebook and its siblings, Instagram and WhatsApp, at the expense of Google search and YouTube, and advertising dollars are quick to follow.
“Facebook is a far more user-friendly platform, even though they haven’t created features specifically for Indian advertisers,” said Vikas Chawla, who runs a small ad-buying agency in India.
Facebook ads, compared with those on Google search or YouTube, tend to transcend language barriers more easily because they rely more on visual elements, said Narayan Murthy Ivaturi, vice president at FreakOut, a Singapore-headquartered digital marketing firm. Pinpointing younger consumers and rural populations is easier with Facebook and its Instagram app, he and other ad buyers said.
And Facebook is succeeding in India, which has the fastest-growing digital ad market of any major economy, despite internal turmoil and political controversy. It has been without a country head for the last year, and has faced a series of incidents in which rumors circulating on Facebook and WhatsApp have prompted mob violence.
Facebook and Google between them took 68 percent of India’s digital ad market last year, according to advertising buyer Magna. Media agency GroupM estimates digital advertising spending will grow 30 percent in India this year.
Eight Indian ad buyers interviewed by Reuters were divided on whether Facebook would overtake Google in Indian ad revenue. That such a question would even be debated explains why Pichai, Google’s CEO, has pressed to flip the company’s approach to emerging markets.
“India is the most important market for the ‘Next Billion Users’ initiative,” Caesar Sengupta, the head of the effort, told Reuters last week.
For many years Google designed its services for early adopters of new technology, who tended to be in Silicon Valley, said Nelson Mattos, who oversaw Google’s Europe and Africa operations for several years.
“Over time, as you saw the growth of Facebook, the importance of WhatsApp and other tools in these new markets, and not the same adoption of Google, the company started to realize that maybe they had to change that approach,” Mattos said.
Shortly after taking the helm three years ago, Pichai mapped a new strategy for places such as India: More services tailored to locals; more marketing on radio, billboards and TV; more local staff and start-up investment.
Google’s India workforce has more than doubled since to 4,000 employees, about eight times Facebook’s presence, according to a tally of LinkedIn profiles. Its products evolved too, becoming easier to use with low- data plans.
The efforts are bearing fruit. Indian users during the first half of this year spent more time on Google services than on Facebook services, according to estimates from audience measurement firm Comscore.


Oil recovers some losses after 6% plunge but markets remain wary

Updated 21 November 2018
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Oil recovers some losses after 6% plunge but markets remain wary

  • Investors remained on edge, with the International Energy Agency warning of unprecedented uncertainty in oil markets
  • ‘The global economy is still going through a very difficult time and is very fragile’

SINGAPORE: Oil prices on Wednesday clawed back some of the previous day’s more than 6 percent plunge, lifted by a report of an unexpected decline in US commercial crude inventories as well as record Indian crude imports.
But investors remained on edge, with the International Energy Agency (IEA) warning of unprecedented uncertainty in oil markets due to a difficult economic environment and political risk.
International Brent crude oil futures were at $63.19 per barrel at 0239 GMT, up 66 cents, or 1.1 percent from their last close.
US West Texas Intermediate (WTI) crude futures, were up 66 cents, or 1.2 percent, at $54.09 a barrel.
Wednesday’s gains came after a report by the American Petroleum Institute late on Tuesday that US commercial crude inventories last week fell unexpectedly by 1.5 million barrels, to 439.2 million, in the week to Nov. 16.
Record crude imports by India of almost 5 million barrels per day (bpd) also supported prices, traders said.
Yet Wednesday’s bounce was small in the context of the general market weakness, which saw crude tumble by more than 6 percent the previous session amid a selloff in global stock markets.
“The global economy is still going through a very difficult time and is very fragile,” IEA chief Fatih Birol said on Tuesday.
“Rising global growth fears smashed oil markets and saw European and US shares slide,” futures brokerage CMC Markets said in a daily note.
With output surging and the demand outlook deteriorating, the Organization of the Petroleum Exporting Countries (OPEC) is pushing for a supply cut of between 1 million and 1.4 million bpd to prevent a repeat of the 2014 glut.
“We would anticipate further weakness until the reaction from OPEC+ (Dec. 6) and the G20 summit is clearer (Nov. 30/Dec. 1),” said Ashley Kelty, oil analyst at investment bank Cantor Fitzgerald Europe.
Despite an expectation of OPEC-led cuts, Brent and WTI prices have slumped by 28 and 30 percent respectively since early October, and the entire structure of the forward price curve has changed.
The Brent forward curve was in steep backwardation in October, implying a tight market with prices for spot delivery higher than those for later dispatch. This makes it unattractive to store oil.
Since then, however, the curve has moved into contango for most of 2019, implying oversupply as higher prices further out make it attractive to store oil for later sale.
“Investors are becoming increasingly concerned that any potential production cuts by OPEC will be insufficient to cover the surplus in the market,” ANZ bank said on Wednesday.
“The list of reasons for the decline are pretty specific ... too much supply and a risk of slowing demand growth,” said James Mick, Energy Portfolio Manager with US investment firm Tortoise.
“Part of the supply issue has been surging US production,” he added.
US crude oil production has jumped by almost a quarter this year, to a record 11.7 million bpd largely because of a surge in shale output.